Monthly Payment
£500.95
£25,000.00
£5,056.92
£30,056.92
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Over 60 months, you'll pay £500.95/month for a total of £30,056.92
| Term | Monthly Payment | Total Interest | Total Cost |
|---|---|---|---|
| 24 months | £1,124.99 | £1,999.76 | £26,999.76 |
| 36 months | £777.66 | £2,995.60 | £27,995.60 |
| 48 months | £604.47 | £4,014.68 | £29,014.68 |
| 60 months | £500.95 | £5,056.92 | £30,056.92 |
| 72 months | £432.25 | £6,122.20 | £31,122.20 |
| 84 months | £383.46 | £7,210.38 | £32,210.38 |
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | £500.95 | £344.70 | £156.25 | £24,655.30 |
| 2 | £500.95 | £346.85 | £154.10 | £24,308.45 |
| 3 | £500.95 | £349.02 | £151.93 | £23,959.43 |
| 4 | £500.95 | £351.20 | £149.75 | £23,608.22 |
| 5 | £500.95 | £353.40 | £147.55 | £23,254.83 |
| 6 | £500.95 | £355.61 | £145.34 | £22,899.22 |
| ... | ||||
| 12 | £500.95 | £369.15 | £131.80 | £20,718.42 |
| ... | ||||
| 24 | £500.95 | £397.81 | £103.14 | £16,104.46 |
| ... | ||||
| 36 | £500.95 | £428.69 | £72.26 | £11,132.29 |
| ... | ||||
| 48 | £500.95 | £461.97 | £38.98 | £5,774.13 |
| ... | ||||
| 58 | £500.95 | £491.67 | £9.28 | £992.58 |
| 59 | £500.95 | £494.75 | £6.20 | £497.84 |
| 60 | £500.95 | £497.84 | £3.11 | £0.00 |
How this calculator works
One closed-form equation for the payment, then a month-by-month schedule that shows where each payment actually goes.
The formula
M = P × r × (1+r)^n ÷ ((1+r)^n − 1) where r = APR ÷ 100 ÷ 12 and if r ≤ 0: M = P ÷ n- M
- The level monthly payment. Identical every month for the whole term — there is no balloon and no adjusted final payment.
- P
- The amount you are actually borrowing, after any deposit or trade-in. Displayed in whichever currency the site has detected for you.
- r
- The monthly rate. The code computes rate / 100 / 12 — a nominal monthly rate, not the twelfth root of the annual rate, and applied monthly rather than daily.
- n
- The number of monthly payments, taken straight from the term dropdown: 12, 24, 36, 48, 60, 72, 84 or 120.
- total
- M × n. The total interest is that figure minus P, so every cost the calculator reports is interest and nothing else.
- schedule
- Each month: interest = balance × r, principal = M − interest, balance = balance − principal, floored at zero on the final row.
Edge cases are handled explicitly rather than left to produce NaN. A rate of zero or below skips the formula entirely and returns P ÷ n, which is correct for 0% finance. An empty or zero loan amount returns zeros across the board. The monthly payment, total cost and total interest are each rounded to two decimals only at the very end; the amortization schedule uses the unrounded payment throughout, which is why the payment on screen multiplied by the term differs from the total by a few cents.
Every fixed-rate loan is solved by the same question: what single repayment, made every month for the whole term, leaves the balance at exactly zero on the last month? That is what the formula above answers. The calculator converts your annual rate to a monthly one by dividing by twelve, raises one plus that monthly rate to the power of the number of payments, and rearranges to find the level payment. Nothing is estimated and nothing is iterated — it is one closed-form calculation, which is why the number updates the instant you change a field.
The rate conversion is worth being precise about, because it is the tool's biggest simplification. Dividing an annual rate by twelve gives a nominal monthly rate, not a compounded one. A 7.5% annual rate becomes 0.625% a month, and 0.625% compounded twelve times actually comes to about 7.763% a year, not 7.5%. This is the convention almost every consumer lender and every mainstream loan calculator uses, so the answer will match your loan agreement — but it means the rate on screen is a nominal rate, not an effective annual one.
The amortization schedule is built separately, month by month, and it is the honest part of the page. Starting from the full balance, each month charges interest of balance x monthly rate, treats the rest of the payment as principal, and carries the reduced balance forward. Because the payment never changes while the balance shrinks, the interest share falls every single month and the principal share rises to match. The schedule on screen only shows the first six months, every twelfth month and the last three, but all of them are calculated.
Two smaller behaviours are worth knowing. The schedule uses the unrounded payment internally and only rounds the headline figures to two decimals at the end, so the monthly payment on screen multiplied by the term will differ from the total cost by a few cents. And the comparison table recalculates every term from 24 to 84 months at your rate and amount, independently of which term you selected, which is the fastest way to price the length of a loan rather than just its size.
A worked example
A US auto loan, run end to end. These are the calculator's own figures on its default inputs.
$25,000 borrowed at 7.5% over 60 months
Worked example- Amount borrowed (P)
- $25,000
- Annual rate typed in
- 7.5%
- Monthly rate (r = 7.5 ÷ 100 ÷ 12)
- 0.00625
- Number of payments (n)
- 60
- (1 + r)^n
- 1.4532944
- M = 25,000 × 0.00625 × 1.4532944 ÷ 0.4532944
- $500.95
- Total cost (M × n, before rounding)
- $30,056.92
- Total interest (total − P)
- $5,056.92
Month one in detail: interest is 25,000 × 0.00625 = $156.25, so $344.70 of the $500.95 goes to principal and the balance falls to $24,655.30. By month 12 the split is $131.80 interest and $369.15 principal; by month 60 it is $3.11 interest and $497.84 principal, closing the balance at zero. The payment never moves — only the mix does. Change nothing but the term and the picture changes sharply: 36 months costs $777.66 a month but only $2,995.60 in interest, while 84 months costs $383.46 a month and $7,210.38 in interest. Going from 60 to 84 months saves $117.49 a month and costs an extra $2,153.46 overall.
How to read your result
What a good number looks like, what a bad one means, and what to do about each.
Three numbers come out of this calculator, and the one people fixate on is the least informative. The monthly payment tells you whether the loan fits this month. The total interest tells you what the loan actually costs. The total cost tells you what you are handing over in exchange for the thing you are buying. A loan that looks affordable on the first number and indefensible on the second is the single most common outcome, and it is almost always caused by the term rather than the rate.
A useful first test is the interest as a share of what you borrow. On the worked example below — $25,000 at 7.5% over five years — the interest comes to $5,057, or about 20% of the amount borrowed. Under roughly 10% usually means either a short term or a genuinely cheap rate, and there is not much left to optimise. Somewhere north of 30% means the term is long, the rate is high, or both, and it is worth going back to the comparison table before you sign anything.
The second test is what the payment does to your monthly budget once everything else is in it. Statistics Canada measures this at national scale as the debt service ratio, and Canadian households were putting 14.75% of disposable income toward required debt payments in the first quarter of 2026. You are not aiming to match a national average, but the exercise is the same: add this payment to every other required debt payment you already make, and see what share of your take-home pay is now committed before you have bought any food.
Third, if you are financing a car, remember the loan payment is not the cost of the car. AAA modelled the total cost of owning and running a new US vehicle at $964.78 a month in 2025, and the loan is only one line of that alongside depreciation, fuel, insurance, tyres and maintenance. Vehicle insurance alone reached $1,993 a year per US consumer unit in 2024 after two consecutive double-digit annual increases. A $500 payment that fits perfectly becomes a $900 problem the moment the insurance renewal arrives.
Finally, compare the rate you have been offered against the alternatives you already hold. If the loan rate is below the rate on a card you are carrying, consolidating genuinely saves money. If it is above, the loan is the expensive option and the card is not the emergency. And if the rate is high because your credit file is thin rather than bad, a few months of clean payments before applying can move you a band, which is worth far more than shopping for a better lender at the same band.
Rates and costs to compare yourself against
US and UK figures are given side by side because the two markets price and publish borrowing costs differently. All are averages across large populations, so treat them as orientation rather than as the rate you will be offered.
6.85%
Average advertised rate on a £10,000 UK personal loan
July 2026. A quoted rate — what lenders advertise, not the effective rate borrowers pay. It bottomed at 6.27% in February 2026 and has risen every month since.
Source: Bank of England, quoted household interest rates (IUMHPTL)
12.05%
Average advertised rate on a £5,000 UK personal loan
July 2026. Nearly double the £10,000 rate for half the money — lenders price in bands, and the smallest loans sit in the most expensive one.
Source: Bank of England, quoted household interest rates (IUMBX67)
22.15%
Average US credit card rate on accounts charged interest
2026 Q2, preliminary. The number a consolidation loan has to beat. The all-accounts average, which includes people who clear the balance monthly, was 20.94%.
717
Average US FICO Score
As of April 2024, one point lower than a year earlier, on the 300-850 scale. Score band is the single biggest driver of the rate a lender will quote you.
Source: FICO, FICO Decisions Blog
$964.78
Monthly cost of owning and running a new US car
2025. A modelled figure over five years at 15,000 miles a year, covering depreciation, fuel, insurance and maintenance as well as finance. It overstates the cost of an older paid-off car.
Source: AAA, Your Driving Costs
$1.57tn
Total US motor vehicle loans outstanding
2026 Q2, not seasonally adjusted. A national total, not an average loan size — for scale, US student loan debt outstanding was $1.86 trillion in the same quarter.
What this calculator does not account for
Every loan projection is a simplification. These are the specific ones this tool makes.
- No fees, and no distinction between rate and APR
- Origination fees, arrangement fees, documentation fees, broker commission and credit insurance are all ignored. Whatever you type is treated as a pure interest rate divided by twelve. If your quote's APR already bundles a fee, the calculator will spread that fee across the term as interest rather than charging it up front, which understates the early cost and overstates the later interest.
- The rate is fixed for the entire term
- There is no variable rate tracking a base rate, no promotional period that expires, and no penalty rate after a missed payment. If your loan is variable, run it at the current rate and again at a rate two or three points higher, and treat the honest answer as somewhere in between.
- Monthly interest at rate divided by twelve
- Interest is charged once a month on the outstanding balance at the annual rate divided by twelve. That is a nominal conversion, not a compounded one, and most lenders accrue daily rather than monthly. Expect small differences against your real statements, particularly in months with unusual numbers of days or when a payment date moves.
- No overpayments, underpayments or missed payments
- Every payment is assumed to arrive in full and on time for the whole term. There is no way to model an extra payment, a lump sum, a payment holiday, arrears or a default. To approximate an overpayment plan, compare a shorter term in the comparison table instead.
- No balloon payment, deposit or trade-in
- The formula assumes the balance reaches zero at the end. PCP and lease deals, which end with a large optional final payment, cannot be modelled here. If you are putting down a deposit or trading a vehicle in, enter only the amount you are actually borrowing.
- No taxes, insurance or running costs
- Nothing is included beyond principal and interest — no sales tax, no registration, no vehicle insurance, no home insurance, no property tax, no maintenance. For a mortgage in particular, principal and interest are a fraction of the real monthly outlay.
- No tax relief and no inflation adjustment
- Interest deductions available in some markets, such as US student loan or mortgage interest, are not applied. Nor is anything adjusted for inflation, so a payment in year seven is shown in the same money as a payment in month one even though it will feel smaller.
- Fixed term options only
- The term is a dropdown of 12, 24, 36, 48, 60, 72, 84 and 120 months, so a 30-month or 15-year loan cannot be entered exactly. The comparison table always prices 24 to 84 months regardless of which option you picked.
- Rounding and the final payment
- The schedule runs in full floating point and the headline figures are rounded to two decimals at the very end, so the displayed payment multiplied by the term will differ from the displayed total by a few cents. The final balance is floored at zero. Real lenders adjust the last payment slightly to settle the difference; this calculator keeps every payment identical.
- It says nothing about whether you should borrow
- The tool prices a loan. It has no view on whether the purchase is worth it, whether a cheaper alternative exists, or whether the payment survives a month when the car needs tyres. That judgement is yours, and it belongs in a budget rather than a calculator.
None of this makes the result useless — the payment figure will match a mainstream fixed-rate loan agreement closely. It makes the total a floor rather than a ceiling, and the direction of the error is knowable: fees, insurance and daily accrual all push the real cost above the number shown, never below it.
Loan calculator questions, answered
Including the awkward ones about rounding, APR and what the model quietly leaves out.
How does this calculator work out my monthly payment?
It uses the standard level-payment amortization formula: M = P x r x (1+r)^n / ((1+r)^n - 1). Your annual rate is converted to a monthly one by dividing by 12, and the number of payments is the term in months exactly as you selected it. The result is a single fixed payment that clears the loan to zero on the final month, with no balloon and no final adjustment.
Is the rate I type the same as APR?
The field is labelled APR, but the maths treats whatever you type as a nominal annual interest rate and divides it by twelve. A true APR is defined to include compulsory fees such as arrangement or origination charges, so if you type a headline APR that already contains fees, the calculator quietly spreads those fees across the term as if they were interest. That is close enough for comparing offers and slightly overstates the pure interest cost. It does not add any fee you have not typed in.
Why doesn't the monthly payment times the number of months equal the total cost shown?
Because the rounding happens at different points. The calculator multiplies the unrounded payment by the number of months to get the total, then rounds that total to two decimals — it does not multiply the rounded payment you see on screen. On the $25,000 example below, 500.95 x 60 comes to $30,057.00 while the total shown is $30,056.92. The eight-cent gap is arithmetic, not an error, and your lender will resolve it by adjusting the final payment.
What happens if I enter 0% interest?
The calculator handles it explicitly rather than dividing by zero: the payment becomes the loan amount divided by the number of months, the total interest is zero, and the amortization schedule shows every payment as pure principal. This matters because 0% dealer finance and 0% promotional deals are real products. A negative rate is treated the same way as 0%.
Why is my first payment almost all interest?
Interest each month is charged on the balance that is still outstanding, so the first month is the month you owe the most. On a $25,000 loan at 7.5%, month one charges $156.25 of interest and repays $344.70 of principal; by month 60 the split is $3.11 interest and $497.84 principal. The payment never changes — only the mix does. That is why paying a loan off early saves less near the end than it does at the start.
Does the calculator include fees, insurance or taxes?
No. Arrangement fees, origination fees, documentation fees, sales tax, registration, gap insurance, payment protection, extended warranties and dealer add-ons are all outside the model. If a fee is added to the amount you borrow, include it in the loan amount. If it is paid separately up front, this calculator will never see it, and your true cost of borrowing is higher than the total shown.
Should I take a longer term to get the payment down?
Only with your eyes open about the price. On the $25,000 example, stretching from 60 to 72 months cuts the payment by $68.70 a month but adds $1,065.28 of interest, and 84 months adds $2,153.46 against the 60-month plan. The comparison table on this page prices every term from 24 to 84 months on your own figures, so make the trade deliberately rather than accepting whatever term makes the payment look affordable.
What interest rate should I expect?
It depends far more on your credit file and the type of loan than on the lender you pick. Secured lending against a car or a house prices below unsecured lending; unsecured personal loans price below cards and overdrafts. In July 2026 the Bank of England put the average advertised rate on a UK £10,000 personal loan at 6.85%, and the Central Bank of Ireland put the average rate on new Irish consumer loans at 7.25% in May 2026. Always get a quote based on a soft search before you formally apply.
Is it worth borrowing more to reach a cheaper rate tier?
Lenders price in bands, and the bands can be startling. Bank of England figures for July 2026 show an average advertised rate of 12.05% on a £5,000 personal loan against 6.85% on a £10,000 one — nearly double the rate for borrowing half the money. Borrowing £10,000 at the cheaper rate and immediately overpaying the £5,000 you did not need can work out cheaper, but only if you genuinely do not spend it, and only if the loan allows overpayments without penalty. Model both before you decide.
Can I model overpayments or paying the loan off early?
Not directly — this calculator holds the payment constant for the full term. The practical workaround is to shorten the term instead: if you are considering paying an extra $70 a month on a 72-month loan, look at the 60-month row in the comparison table, which is roughly the same total monthly outlay. That tells you the interest you would save. It will not match a real overpayment to the cent, because a real overpayment reduces the balance immediately rather than being spread evenly.
Is a personal loan cheaper than paying off a credit card?
Usually yes on rate. The Federal Reserve's G.19 release put the average rate on US card accounts actually charged interest at 22.15% in the second quarter of 2026, against single-digit advertised rates on mainstream personal loans. The catch is behavioural rather than mathematical: consolidating a card balance into a loan only helps if the card then stays at zero. If the card fills back up, you now have both debts.
Does this work for a mortgage, a PCP car deal or a student loan repayment plan?
It works for anything that is a fixed-rate, fixed-term, fully amortizing loan. It does not model a mortgage's taxes, insurance or rate resets — use the mortgage calculator for that. It does not model a PCP or lease, because those end with a large balloon payment the formula assumes away. And it does not model income-driven student loan repayment, where the payment is a percentage of income and the balance can grow rather than shrink.
Read next
Read next
- Dealing with debt: a practical UK guidePriority debts, free advice, and what to do when the repayment does not add up.
- How to improve a bad credit ratingThe rate you get is set by your file. This is how to move a band before you apply.
- Debt snowball vs avalancheIf this loan is one of several debts, the order you clear them in changes the total.
- Types of credit card explainedWhen a 0% transfer beats a consolidation loan, and when it quietly does not.
- Understanding your mortgage calculationThe same amortization maths, plus the taxes and insurance this tool leaves out.
- Build a household budget, step by stepWhere to put the payment so you find out now whether it fits.
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